A Last Will and Testament is a testamentary document, which is triggered at the Testator’s death (the Testator is the person establishing the Will). There is no re-titling of assets involved with a Will since the assets remain in the Testator’s individual name during his or her lifetime. At the Testator’s death, any assets held in the Testator’s individual name for which no beneficiary designation has been made will become “probate assets” and will need to be probated under the Testator’s Will. In such case, the Executor must file the Will with the probate clerk in the County where the deceased Testator resided at the time of his or her death. Upon filing the Will, the Executor will qualify as the “Executor” named in the Will, which opens the probate process. The Will is filed with the County Probate Records and becomes a public document.
A Revocable Trust is established during the Grantor’s lifetime (the Grantor is the person establishing the Trust) and the goal is for the Grantor to re-title certain assets to the Trust during the Grantor’s lifetime so that the assets will avoid probate upon the Grantor’s death. Upon the Grantor’s death, the person named in the Trust as the Grantor’s Successor Trustee will distribute the assets to the Trust beneficiaries according to the provisions of the Trust and avoid probate court involvement. In addition, during the Grantor’s lifetime, if the Grantor becomes incapacitated the Successor Trustee will have immediate access to the assets held in the Trust in order to pay the Grantor’s ongoing expenses, such as a mortgage, car payment, property taxes, etc. Unlike a Will, a Trust is not filed with the probate clerk and, therefore, remains confidential.
In the case of a Will, since the Will is not triggered until the Testator’s death, if the Testator becomes incapacitated his or her agent named in the individual’s financial power of attorney will have access to the individual’s assets in order to pay any ongoing expenses and manage the accounts during such incapacity. However, if the financial power of attorney is deemed as being “too old” by a financial institution, and consequently is not accepted by the institution, the agent will not have access to the individual’s accounts. In this case, the individual’s agent/Executor/family member will need to file for a Conservatorship for the incapacitated individual to manage the individual’s assets. Many people choose to establish a Revocable Trust to avoid probate, to facilitate management of finances in the event of incapacity, and to maintain confidentiality.